Help a Poor LO Before She Kills Her Appraiser

[CathCoy]

You're all very kind to answer so thoughtfully and thoroughly.

Appraiser's report is in and it says: Security bars have quick releases in two bedrooms (not tested by appraiser); no releases in middle bedroom. This appraisal subject to middle bedroom safety bars being brought up to local fire code.

I asked the appraiser (via email): Can you find something similar [one of you posted the FHA guidelines here] in Fannie/Freddie appraisal guidelines? This is a conventional--not FHA--loan.

She responded: The borrower is going to have to check into this or you can ask the underwriter. As I told the borrower when I was out there, the lender's main concern is going to be making sure there is a way to exit the bedroom quickly in case of a fire. They will need to either install a quick release on the barred window or if they remove the safety bars, most lenders require the stucco to be patched afterward so the borrower can't just re-install the bars again after the close of escrow.

I wrote: You called it out, so you must have some basis for doing so. Are you familiar with the fire code? If so, can you provide the pertinent section? If you can't provide it, why did you call it out? How many windows are in that room?

See, this is what I object to. I have now spent four days trying to get to the bottom of this issue. I can't reach her by phone and she gives me incomplete answers when I ask the questions. All of this could have been avoided if she had called me from the field to tell me she had a condition that must be included.

This has NOTHING to do with a commission or reaching a predetermined value. It has to do with getting the job done efficiently and effectively by having a conversation with me so I can get the appropriate clarification for the borrower.

And what is meant by the following statement by a poster above?

The cost to cure on an item like this is going to be less than $500. You can structure your loan properly to affect this cure and everyone's needs will be served, including your own.

 

[Pamela Crowley (Florida)]

CathCoy,

Security bars that do not open on a bedroom window is definately a safety issue.

Have the homeowners fix this situation and get on with your life.

This is an appraiser that will cover YOUR butt along with hers, your bosses, Fannie or Freddie or FHA or VA plus the investors that purchase the package the loan is part of. If you know about this thread, that appraiser probably does too.

We all learned from this and I thank you for bringing it up. Now, it's time for you to do what is right instead of looking for a loophole to do what is wrong.

 

[Tim Hicks (Texas)]

Well said, Pam. I don't know Cathy personally, but she sounds like she is wants to will the security bar issue away. I don't care what the room is used for now, if it was designed to be a bedroom, then the security bars, must have a release. It is not that big an issue, but it is a simple solution. Fix that window and close the loan.

 

[Stone]

Cathy-

Your last post concerns me. As appraisers, we are asked/expected to observe or "call out" problems in fields that we do not have expertise in. If we see mold, or other environmental issues, we "call them out." If we do not, we aren't doing our jobs. Why would a potential safety issue be different?

Your original question about whether or not the appraiser should have discussed the problem with the owner was legit, although I agree with Richard Carlsen that the owner probably talked the appraiser's head off during the inspection. It is always a little tricky to balance being polite and answering questions. I am also guessing that the homeowner was in the den/bedroom and saw the appraiser looking at the bars, which probably created a round of "what are you looking at? Does that affect the value?" Obviously I wasn't there, but this seems like a good possibility.

This last post, however, seems to have a different tone to it. Perhaps the problem isn't the chatty appraiser, but the fact that something that slows the process was brought up. It is always hard to tell in print, but it would appear that the issue is not just that the homeowner was informed.

 

[CathCoy]

Perhaps the problem isn't the chatty appraiser, but the fact that something that slows the process was brought up.

Something that POSSIBLY could slow the process. I don't even yet know definitively what the rules are and neither, apparently, does the appraiser, since she's only guessing and wants me to do the follow-up work. Sloppy, in my opinion.

 

[Farm Gal]

Ummm Cath?

Either you want her to follow up with local authorities, or you don't... Throwing rocks at the appraiser on both sides of the fence isn't real reasonable!

None of us are completely EXPERT at this profession, because the rules change daily and each client has their own set of written and unwritten rules which we in the field are supposed to somehow obtain through some method like osmosis.... Problem is the rules change for different situations at different rates.

WE who consider ourselves professional as opposed to check collectors are doing the best we can in a cahnging environment. The majority of the respondents to your original question are folks for whom I (at least) thave developed a significant amount of professional respect.

EVERY one of those people reponding for whom I have professional respect on this forum, have voiced the opinion that stating that there was a dangerous situation present in the house, that the lender NEEDED to be apprised of the situation IN WRITING. What the lender elects to DO about his situation is entirely up to the LENDER...

IF you are not the lender: why do you not just pass the problem on to the concerned (or unconcerned) party? If you ARE the lender, please understand that as of the latest set 'rules' for appraisers the appraiser acted properly in addressing the potentiallly fatal situation IN WRITING, as opposed to a phone call which message could have gotten lost in the shuffle, and would have likely resulted in the same set of running around in circles.....

all other issues of hesaid/shesaid are immaterial to us as we cannot address only one side of thrid party reporting of a situation.

I sincerely hope you resolve your problem, but cannot see much sense in continueing to stir things up here... we have as a group provided you with given some insights as to how our minds generally work, it appears to be in general accord with the appraiser in question. Perhaps it is now time for the two of YOU to sit down and chat.

... and Cath?
May I suggest that you try not to get hasty or mean in the process: recall your original title to this post! I think we have tried to address your concern. Take a deep breath and either go dutch or buy the gal some lunch... and don't start a food fight :wink:

 

[wyecoyote]

Cathcoy,

I wrote: You called it out, so you must have some basis for doing so. Are you familiar with the fire code? If so, can you provide the pertinent section? If you can't provide it, why did you call it out? How many windows are in that room?

Ok I may get attacked for this but, I do agree with Cathcoy on this issue. That if we as appraisers call an issue out we should have the information so as to better educate our clients on these issues. These issues should be dealt with professionaly not with the attitude "just because I said so" but, instead "this is where you can find the information about the issue". IMHO people should be more profesional and read the current standards not with the attitude "I was taught this way so it is fact". IE.. We had one client state that it was illegal for us to pdf our appraisal reports and digitally sign them. We provided USPAP's & FNMA's clarifiaction on this and then asked the client to provide where it stated that this was illegal or provide their guidelines so we could conform to them. That did shut the client up and now this same client only wants pdf copies.

Ryan

 

[CathCoy]

I'm checking with the City myself so that I can appropriately direct the borrower about what to do.

Why this is my job I don't know, but I'm doing it.

 

[George Hatch]

Cathy,

We have now gone beyond the original complaint that your borrower got bent out of shape because the appraiser said something to them during the course of an inspection. This point is debatable depending on who you ask. Now we are talking about whether the appraiser should include mention of this deficiency (and to most appraisers and lenders, this is a deficiency) in their appraisal report. This is no longer a debatable point. Now we don't know what state your in, so looking up your state fire code is beyond our abilities right at the moment. There is the national uniform building code, which has references for this, and I'm sure there is a regional building code, pretty similar in content on this to the national code. I'm also pretty sure that the mortgage insurance program you're lender will be using to underwrite this loan package also has similar requirements. The city or county zoning codes likely have a prohibition against this somewhere. I'd actually be surprised if this specific deficiency (and it is a deficiency) is not mentioned in almost every single one of the sources I've cited above. If it isn't mentioned in every single one of those programs, it should be because it is a deficiency. Health and safety; it doesn't get any more serious than this.

It seems at this point that you are looking at this situation as a roadblock to successfully closing another loan this month rather than a chance to help clear up a deficiency (and it is a deficiency) and provide your lender with a slightly sounder loan package. Not only that, but you're asking your appraiser to take the full responsibility of making that decision, which is not their job, by seeing if you can get them to omit something they would normally report, which is their job. Interior releases for bedroom window bars is a situation that every lender I have ever dealt with (17 years now) have a policy against. For the record, your appraiser is not making up requirements as they go along, and they aren't doing this to aggravate your or your borrower. At the very least, the appraiser is trying to protect themself from liability because knowingly withholding disclosure on a deficiency (and this is a deficiency) could result in a non-covered claim against their Errors and Omissions insurance policy, and could probably also earn them some regulatory discipline from your state's Appraisal Board. Up to and including a fine, suspension, or revocation of their appraisal license.

I was the one who suggested that the cost to cure would be less than $500 and you could structure your loan properly to resolve this issue very quickly. And you can. All you have to do is to structure the loan so that $500 is withheld pending the repair of this deficiency (and it is a deficiency), then remit the remainder upon proof of the repair. It might take as long as a week. Fund control the repair. It's the same as if you were funding a remodel, big repair or other item where your borrower doesn't have the cash up front to fix the deficiency (and this is a deficiency). I have clients that do this kind of thing on a regular basis, so I know it can be done.

These is no way you should even consider asking an appraiser to not mention this deficiency (and it is a deficiency) in an appraisal report. If your loan program cannot handle this readily curable glitch, maybe you should refer your borrower to a program that will handle it properly. If you're located in California, every single client I work for can handle this. I think it just comes down to what your priorities are and what your definition of a good loan package is.


George Hatch

 

[CathCoy]

I'm also pretty sure that the mortgage insurance program you're lender will be using to underwrite this loan package also has similar requirements.

There is no mortgage insurance involved.

This thread has degenerated, alright, from me asking if anyone knew what the requirements are for a conforming loan to me being an unethical, commission-grubbing, "typical" loan officer.

I want a heads up from my appraiser, and I didn't get it. Next!